Text 2 Corporations

Task: Read and translate the text:

In the course of their commercial activities, states will deal not only with each other but with companies and trading concerns from all around the world. Normally, their legal relations with such bodies will be governed by the national law of one or more states. In the normal course of events, the state is in the same position as any other litigant, and just because it chooses to act with a non-state body does not confer any degree of international personality on the latter. International personality exists only when relationships are governed by international law. So a contract between the UK government and a German company for the construction of a battleship would not ordinarily confer international legal personality on the company. The contract would be governed by the national law of either Germany or the UK, and both the government and the company would be subject to the national law. However, that said, there are circumstances in which the contractual relationship between a state and a corporation will be governed by international law. For example, a concession agreement for the extraction of oil might be an 'internationalised' contract subject to rules of international law (e.g. Texaco v Libya (1977) 53 ILR 389) or states may have agreed that certain types of dispute with companies be settled by an international panel of judges applying international rules. Thus, the Convention on the Settlement of Investment Disputes 1964 established a permanent machinery whereby participating states and corporations could settle any differences arising out of investment agreements. Participation in such bodies, where the rights and duties of the company may be judged according to international law, entails international personality. Once again, the existence and extent of this personality depends ultimately on the agreement and recognition of states.